FTX Under ‘Active’ Investigation In Bahamas

Bahamian authorities have defended their handling of collapsed cryptocurrency exchange FTX, after it emerged that regulators had seized nearly a half-billion dollars in assets from the firm shortly after it filed for Chapter 11 bankruptcy in the US.

Bahamian Attorney General Ryan Pinder on Sunday said FTX remains the subject of an “active and ongoing investigation” and that the company’s Securities Commission had acted quickly “because of the strength of the legislative framework”.

FTX, which is headquartered in the Bahamas, is the subject of probes there and in the US following its 11 November bankruptcy filing.

Funds seizure

The Securities Commission of the Bahamas acknowledged last week it was behind the transfer of an estimated $477 million (£394m) in crypto assets from FTX on 12 November, seizing the funds the day after its bankruptcy filing. The funds were initially suspected to have been stolen by hackers.

The Commission “took the action of directing the transfer of all the digital assets of FTX Digital Markets Ltd. to a digital wallet controlled by the commission, for safekeeping”, it said at the time.

“We are in the early stages of an active and ongoing investigation,” Pinder said in prepared remarks on Sunday, saying the probe involved civil and criminal authorities.

He said in the “complex investigation” the Bahamas Securities Commission, Financial Intelligence Unit and the police’s Financial Crimes Unit would “continue to investigate the facts and circumstances regarding FTX’s insolvency crisis, and any potential violations of Bahamian law”.

‘Regrettable’

He hit back at statements by John Ray, who is currently in charge of restructuring FTX, in US bankruptcy proceedings about the Bahamian authorities’ actions were “regrettable”.

“Any attempt to lay the entirety of this debacle at the feet of the Bahamas, because FTX is headquartered here, would be a gross oversimplification of reality,” Pinder said.

FTX said in earlier bankruptcy filings it believed the Bahamian government had obtained “unauthorised access” to the company’s assets.

“It is possible that the prospect of multimillion dollar legal and consultant fees is driving both their legal strategy and the intemperate statements,” said Pinder, calling for “prudence and accuracy in all future filings”.